Question
Fever Pitch has a projected income statement this year of Sales$80,000 Cost of Sales50,000 Gross Profit30,000 Operating Expenses10,000 Operating Profit20,000 Interest expense3,000 Earnings before tax17,000
Fever Pitch has a projected income statement this year of
Sales$80,000
Cost of Sales50,000
Gross Profit30,000
Operating Expenses10,000
Operating Profit20,000
Interest expense3,000
Earnings before tax17,000
Taxes6,800
Profit after tax$10,200
However, the president of Fever Pitch is not happy with this forecast. She has told Fever Pitch managers she wants a profit of $12,500 for next year. Assume that the tax rate remains at 40%, operating costs keep the same proportion to sales, and interest will be unchanged. What sales goal must Fever Pitch reach to achieve the desired profit level?
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